Which forces should win?
In the immediate term, especially as Washington continues to dance around the sequestration issue, it’s unclear which forces will win the battle. This type of uncertainty usually leads to increased volatility until some direction can be set. Over the longer term, increasing demand and the reality that the economy is not as stable as we’d like to believe should drive prices higher. If you can stomach the roller coaster, maintaining an allocation to silver is a good idea.
How to participate
For most investors, there are three options: an ETF investment, exposure to silver miners such as First Majestic Silver Corp (NYSE:AG) or Pan American Silver Corp. (USA) (NASDAQ:PAAS), or a silver streaming play. Between the first two options, SLV looks a bit more attractive given the recessionary pressures the market faces. Both First Majestic Silver Corp (NYSE:AG) and Pan American face ballooning costs and increased environmental pressure. SLV is a more direct commodity play that should be less influenced by the vagaries of the company-specific operations.
Silver Wheaton Corp. (USA) (NYSE:SLW), the leading silver streaming company, is a unique play and still my favorite choice. The company buys the production of other producers at predetermined, fixed prices, meaning that upside in silver prices are more directly available to investors. With reserves of roughly 800 million ounces of silver, the company is uniquely positioned and attractive. Silver Wheaton Corp. (USA) (NYSE:SLW) is a solid choice for the medium and longer terms.
The article Will Silver Move on U.S. Jobs Report? originally appeared on Fool.com.
Fool contributor Doug Ehrman and The Motley Fool have no position in any of the stocks mentioned.
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